Foxtons Sale Fuels Hunt’s Move Into London Luxury Workspace
Jon Hunt, who made 375 million pounds ($582 million) selling London real-estate broker Foxtons Ltd., is using some of his wealth to create a chain of luxury office- properties across the city.
Hunt, 58, will start marketing the first Dryland Business Members’ Club on west London’s Kensington High Street next month, providing flexible workspace to entrepreneurs who don’t want to commit to an office lease. The club offers clients high- speed Wi-Fi, round-the-clock access and a chauffeured Maserati.
The venture “suits everything that I like,” Hunt said in an interview at the club’s first-floor coffee lounge near an open-plan floor of cubicles that members will lease. “It’s property, the deal, it’s buying it right and extracting value.”
Hunt’s sale of Foxtons to private-equity firm BC Partners Ltd. in May 2007, four months before the U.K. housing market’s peak, cemented his reputation as a deal maker. Since then, he has avoided the limelight, investing “several hundred million pounds” in development sites and residential and commercial properties, mostly in the London region.
He declined to comment on the Sunday Times’ estimate in April that his assets are worth 882 million pounds, ranking him in the top 100 wealthiest U.K. residents.
Dryland seeks to combine prime office and business-lounge facilities with a luxury hotel-style service, he said. The first club has a cafe, library and terrace as well as a conference center and meeting rooms.
Flexible-workspace providers are increasingly targeting niche customers as more entrepreneurs use mobile devices and cloud computing to run their businesses. Regus Plc, the world’s largest provider of serviced offices, formed a chain of women- only business clubs in Bristol, Manchester and London called B.Hive with public relations entrepreneur Lynne Franks.
Regus (RGU), based in Luxembourg, has also developed virtual office software and plans to offer its services in transit locations like gas stations and airports. Regus generated 1.16 billion pounds of revenue last year from its centers in 95 countries.
Dryland offers three types of membership. The cheapest monthly rate is 139 pounds for access to the club’s lounges, increasing to 1,299 pounds for private office suites. The fees exclude sales tax and Hunt said his aim is to avoid angering customers with hidden additional charges.
“At first I thought it was a push for me,” said Billie Booth, a freelance personal assistant who rents a cubicle for her work station under the mid-range membership rate of 799 pounds a month before tax. “By working here on a daily basis, I’ve met hundreds of people and have an instant network.”
Hunt set up his first serviced offices at a former bank branch in the Battersea district after the local authority rejected his plan to turn the upper floors into apartments.
“It was a total accident,” he said, when asked how his Dryland venture started.
The club in Kensington opened seven months ago and is about one-third full ahead of its marketing in June, Hunt said. It will probably take two years to reach full membership of 500, lifting the net annual rental income to about 4 million pounds, which is more than double what the building would generate leased as regular offices, he said.
Dryland’s next center will be near the Chancery Lane subway station in the Holborn district of central London. The building, close to the city’s main law courts, will have 100,000 square feet of space that will probably be used mostly by lawyers and accountants.
Hunt said he is also looking at opening a site in Shoreditch, near the City of London financial district, which has become a hub for media and technology start-ups.
Hunt, who has a classic-car collection, has invested mostly in real estate, he said. He owns rental properties and bought plots of land in a bet the sites will appreciate when planning approval or consent for a change of use is obtained. His separate Bacchus venture works with local partners to buy low- quality properties and upgrade them.
Not all his ventures have been a success. An attempt to sell homes in the U.S. at discounted 3 percent commissions ended with Foxtons Inc. closing its operations after the housing market slumped. He shut down the New Jersey-based business in August 2008.
Hunt predicts the U.K. housing market will struggle until 2014 because the scarcity of mortgage finance will keep first- time-buyers on the sidelines.
“The market is unhealthy unless first-time-buyers are back in the market,” he said. “We have two years more of downward- moving finance before we hit the floor. Lending is going to get tougher and tougher.”
To contact the reporter on this story: Simon Packard in London at firstname.lastname@example.org.
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